For full-year 2016, POET Technologies Inc of San Jose, CA, USA — which has developed the proprietary planar optoelectronic technology (POET) platform for monolithic fabrication of integrated III-V-based electronic and optical devices on a single semiconductor wafer — has reported revenue of US$1.86m (compared with none in 2015). This reflects about seven months of contribution from Singapore-based subsidiary DenseLight Semiconductor Pte Ltd (acquired in May) — mainly from photonic sensors for test & measurement applications — plus non-recurring engineering (NRE) revenue of US$154,000. For second-half 2016, revenue was US$1.29m, below the prior guidance of US$1.6–1.8m (which had previously, in December, been lowered from US$2m) due to previously disclosed operational inefficiencies.
Gross margin for full-year 2016 was 26%, impacted by fair value of inventory adjustments related to a prior acquisition. Net loss was US$13.2m ($0.06 per share), up from US$12.1m ($0.07 per share) in 2015. Cash and short-term investments totalled US$14.9m at the end of 2016.
Beginning in late 2016, POET conducted a strategic review of DenseLight, while simultaneously taking steps to improve operational efficiencies. These and other actions taken to streamline the consolidated company and realign management responsibilities were completed during first-quarter 2017. POET has hence also strengthened its management team with the addition of several key personnel, including appointing Rajan Rajgopal as president & general manager of DenseLight.
“Since our last earnings release [in late November, for Q3/2016], POET has made notable progress with the development of our integrated photonics engine,” says CEO Dr Suresh Venkatesan. “We have achieved a very significant milestone for the company – successfully demonstrating the functionality of our vertical-cavity surface-emitting laser (VCSEL) for the integrated GaAs [gallium arsenide] optoelectronic platform,” he adds. After establishing a second supplier for the proprietary epitaxial stack, POET completed the first phase of epitaxial design optimization in January, followed by VCSEL fabrication and validation of its functionality and performance. “The pace of progress has rapidly increased with the resumed development cycles at our epitaxial wafer vendor and our foundry partner in Taiwan, helping to further advance the development of our fully integrated optical engine,” nots Venkatesan. “The development program for the POET photonic engine continues to be focused on single-chip transceivers for the active optical cable (AOC) market.”
Results from the recent validation process indicated that VCSEL threshold currents were near expectations and with good process yields, demonstrating what are claimed to be excellent material properties and surpassing the previous results. POET is now focused on additional performance optimization and is addressing that, along with the rest of its planned ongoing development activities towards a single-chip transceiver optical engine.
Strategic update
POET says that it has also substantiated a complementary opportunity to further leverage DenseLight’s indium phosphide (InP) technology and dielectric waveguide devices developed at BB Photonics Inc (a designer of integrated photonic solutions for the datacoms market, acquired in May 2016).
This new dielectric photonics approach consists of integrating InP-based chips together with dielectric waveguide devices, eliminating the need for active alignment and expensive packaging. In addition to POET targeting the short-reach AOC market, dielectric photonics-based hybrid integration enables the potential for much lower-cost solutions in medium-reach data-center applications, greatly expanding the addressable market across multiple higher-volume opportunities, POET reckons.
The firm also expects to increase its addressable market for sensing products with unique low-cost solutions by incorporating BB Photonics’ designs for waveguide multiplexers and filters together with the DenseLight InP product portfolio.
Collectively, POET’s strategy to pursue new solutions that combine both monolithic and hybrid integration approaches will enable it to target the fast-growing 100G-and-beyond transceiver market, reckons the firm, offering both fully integrated optical engines as well as individual active and passive components.
“Since my appointment earlier this year, I have worked extensively with the board and management team to formalize a strategy that we believe can fully leverage the company’s GaAs and InP technology platforms,” says executive chairman David Lazovsky. “The acquisitions of DenseLight and BB Photonics provided the company with critical capabilities to pursue additional high-volume markets within data communications in order to expand and diversify our business. Moreover, by broadening our integrated photonics platform capabilities, we are significantly expanding the size of the company’s addressable market and business opportunities in data communications with the addition of medium-reach applications,” he adds. “Although it will take additional time to realize these opportunities, I believe our strategy will ultimately drive higher unit volumes and revenue across a broader target market.”
The firm expects that the product development phase for the POET monolithic integration technology, and the integration of BB Photonics technology into the DenseLight product portfolio as part of new hybrid approaches, will be the primary focus of its development activities throughout 2017. Initial commercial revenue contribution from new DenseLight sensing products is also anticipated in 2017.
New products
Also, subsequent to year-end, the firm announced that, leveraging passive dielectric waveguide technology from BB Photonics, low-loss micro-multiplexer and demultiplexer solutions for 100G-and-above transceivers are currently under development. POET highlighted this technology at the Photonic Integrated Circuits International (PIC) conference in Brussels, Belgium (7-8 February), and also discussed the first target application as being local-area network (LAN) WDM filters for high-speed transceivers. The firm expects prototypes to be available in second-quarter 2017, followed by initial sampling with customers during Q3.
In February, DenseLight demonstrated the newest generation of its Constellation series of narrow-linewidth lasers (NLWLs) for Wind LiDAR and distributed acoustic sensing (DAS) applications. The NWL lasers were designed specifically to meet the increasing requirement across multiple end-markets for superior relative intensity noise (RIN) performance and ultra-narrow linewidths, says POET. The new family of products simplifies the overall design process for OEMs, while also shortening development time and accelerating time-to-market, it adds. The firm plans to make engineering samples available in second-quarter 2017 and expects to begin commercial production in the second half of the year.
Business outlook
Preliminary financial results for first-quarter 2017 are expected to reflect a sequential improvement in revenue. Additionally, while management continues to emphasize efforts aimed at minimizing the net cash used from operations, the timing of reaching cash-flow breakeven will largely depend on the future revenue performance of its DenseLight subsidiary as well as continued expense management.
